GALVESTON — In line with a growing movement in higher education, Texas A&M University at Galveston is partnering with a private group to finance and build a 612-bed dormitory on Pelican Island.
Under terms of a public-private partnership, an affiliate of Alabama-based nonprofit Collegiate Housing Foundation will secure up to $55 million in tax-exempt Student Housing Revenue Bonds to build the facility and the university will manage it. Development firm Hunt Construction will build the facility. New Hope Cultural Education Facilities Finance Corp. is the issuer of the bonds.
A public hearing about the issuance of the bonds is planned for 9 a.m. Friday at the island campus.
The bonds will be repaid from revenues generated by rents at the dormitory, rather than from a tax.
The dormitory is planned for a parcel north of Seawolf Parkway and west of Texas Clipper Road. In January, the Texas A&M Board of Regents approved a ground lease of its land that would allow for the development of the Pelican Island student housing by a private group.
More public universities are using such partnerships to finance on-campus dormitories. Proponents say private companies specializing in dormitories can build student housing faster and more cheaply than universities could.
And Collegiate Housing Foundation officials say that in such arrangements, colleges and universities can have much-needed housing without the obligation to repay loans made to construct the facility, or the administrative burden of complying with financial covenants.
Collegiate Housing Foundation officials also say that the issuer’s sole right to be repaid is from the student rental payments and other revenue generated by the facility. As a result, such financing doesn’t affect either the debt capacity of the university or its financial ratings.
Tarelton State University, a member of the Texas A&M University System, in July announced a $25 million student housing project at its Stephenville campus. That project also is being financed through the issuance of tax-exempt bonds and is owned by an affiliate of Collegiate Housing Foundation.
The University of Alabama at Birmingham, the University of California at Irvine and the University of Louisville, to name just a few, also have entered into partnerships with Collegiate Housing Foundation.
With tight state budgets, more universities are seeking ways to finance student housing and other projects, said retired Maj. Gen. Charles McClain, special adviser to Texas A&M University at Galveston’s CEO, Rear Adm. Robert Smith III.
The student housing development would primarily be dedicated to the university’s Maritime Academy on Pelican Island, McClain said.
In the fall, Texas A&M University at Galveston had a projected student population of 2,100, including a record-breaking 400-member Corps of Cadets. Two new residence halls, built at a cost of $28.2 million, opened last fall, offering an additional 588 beds. The island campus manages seven residence halls house for more than 1,000 students.
Contact reporter Laura Elder at 409-683-5248 or firstname.lastname@example.org.
At a glance
What: Public hearing on issuance of up to $55 million in Student Housing Revenue Bonds to build 612-bed student housing facility at Texas A&M University at Galveston campus.
When: 9 a.m. Friday
Where: Texas A&M University Campus, Room 601 of the Sea Aggie Center, 200 Seawolf Parkway